Boeing Co said on Wednesday that it planned to ramp up production of its 737 MAX jets to 38 per month by year-end and keep its annual cash-flow goal, offering some relief to investors after a new manufacturing snafu threatened to derail deliveries.
Boeing shares rose 2.5% in early afternoon trade after the company reaffirmed its plans to generate $3 billion to $5 billion in free cash flow this year, as well as deliver 400 to 450 737 MAXs and 70 to 80 787 Dreamliners.
"We bounded the issue, we booked the non material financial impact in the quarter," West said. "We understand the rework steps required and we started repairs on several airplanes." West said it only takes “days” to fix 737s that are not far into production cycle, but that rework becomes more extensive once the vertical fin is attached to the fuselage. Calhoun said that work could be measured in "weeks".earlier this month that Boeing's schedule called for suppliers to produce 38 737 MAXs a month from June. That is seven jets more than its current production rate. West said the timing of the production hike would be dictated by the availability of fuselages.
"Boeing doesn't really have much choice but to stay the course on its planned production ramp, even if the latest 737 MAX issues will hold up deliveries, add to working capital, and leave the company with a lot to do in the second half," Vertical Research Partners analyst Robert Stallard said in a note to investors.Boeing's first-quarter cash burn slowed to $786 million from $3.57 billion a year earlier on higher jet deliveries.
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